Monday, August 3, 2015

Just in

Renewable fuels proposal threatens progress on ethanol, advanced biofuels

 Washington—The proposed reduction in the amount of renewable fuels that must be blended into the nation’s gasoline supply strikes a blow to conventional ethanol production and dampens the prospects for the further development of advanced biofuels, the American Farm Bureau Federation warned in comments to EPA.

 The Renewable Fuels Standard (RFS2) has reduced the country’s dependence on foreign oil, reduced air pollution, increased farmers’ income and provided well-paying jobs in rural America. “Since the RFS2 was put in place in 2007, the U.S. has seen tremendous growth within the agricultural sector,” Farm Bureau noted. “If the proposed rule requirements are finalized, this decision will stall growth and progress in renewable fuels, as well as the broader agricultural economy.”

 EPA is proposing to require that refiners blend 14 billion gallons of corn ethanol for 2016, short of the 15 billion gallons called for under the RFS. EPA is also proposing slashing the overall renewable fuel blending requirements below what Congress prescribed under the RFS for 2014 through 2016. EPA is proposing blending mandates for renewable fuels overall of 15.93 billion gallons in 2014 (using actual consumption numbers that year), 16.3 billion gallons in 2015 and 17.4 billion gallons in 2016. That overall figure will include 2.68 billion gallons for advanced fuels (biomass-based diesel and cellulosic biofuel) in 2014, 2.9 billion gallons in 2015 and 3.4 billion gallons in 2016.

The corn ethanol number isn’t specified but is the only other mandate covered under the RFS for those years. If the volume requirements are cut as proposed, investments in the infrastructure needed to distribute and dispense larger volumes of ethanol would slow or halt, as would investments in cellulosic biofuels. Farm Bureau’s biggest criticism of the proposal is related to conventional ethanol. The proposed renewable volume, and therefore the implied proposed conventional ethanol mandate, is well below the level mandated by Congress.

While EPA has specific authorization to partially waive the cellulosic ethanol mandate if sufficient volumes of product are not available to meet the mandate, the implied reduction in the ethanol production mandate is not authorized, nor is it warranted as the renewable fuels industry has more than enough capacity in 2015 to produce more than the 15 billion gallons of conventional biofuel Congress called for.

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